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Over the past decade, the PRC has been one of the world's fastest growing economies. According to the National Bureau of Statistics, its GDP grew at a CAGR of approximately 11.7% per annum between 1995 and 2005.
It is generally believed that the economic growth in the PRC will continue. The International Monetary Fund has estimated that the real GDP in the PRC will grow at an annual growth rate of 10% in 2006 and 2007, respectively, which will outpace most of the other major economies in the world. The table below illustrates the forecast growth rate of real GDP in some of the major economies in the world by the International Monetary Fund in 2006 and 2007:
2006F 2007F
(%) (%)
The PRC 10.0 10.0
Emerging Asia 8.7 8.6
USA 3.4 2.9
Euro Area 2.4 2.0
Japan 2.7 2.1
Hong Kong 6.0 5.5
Singapore 6.9 4.5
Strong economic growth and the growth in GDP per capita have resulted in improvements in the living standards and purchasing power of the Chinese people. This is evidenced by the gradual increase in the average income level in the PRC, in particular, among urban households. The per capita annual disposable income of urban households in the PRC increased from approximately RMB4,283.0 in 1995 to RMB10,493.0 in 2005, representing a CAGR of 9.4%. |
